Lumber producers bicker over definition of 15%
Canada says exports increased by 11.3%, below U.S. threshold
OTTAWA - Canadian softwood lumber exports to the United States increased 11.3% between April and June -- safely below the 15% threshold U.S. producers use to determine whether to hit Canada with punitive duties, the trade ministry said yesterday.
"Those were the numbers that we took from U.S. data," said Oussamah Tamim, a spokesman for the international trade department. But he did not provide exact, seasonally adjusted figures detailing the amount of lumber Canada has shipped to the United States since March 31.
That's when the Canada-United States Softwood Lumber Agreement expired, plunging the two countries into a heated trade battle that could cost Canadian producers billions of dollars.
The lumber industry in the United States is seeking anti-dumping duties of 78% on Canadian wood. It maintains that Canada's lumber industry is unfairly subsidized and that lumber is being sold in the United States at artificially low prices.
Canada argues its system is merely different, that Canadian producers have a right to free trade in lumber and that the United States is being protectionist -- a charge supported by U.S. home builders who say they want access to cheap Canadian lumber.
Canada supplies about one-third of the U.S. lumber market, which amounts to a total of $10-billion in annual exports.
The U.S. Commerce department is expected to release its preliminary decision tomorrow, on whether countervailing duties will be imposed on Canada's exports of softwood lumber.
The department must also decide whether Canada's shipments surged by an adjusted 15% or more between April and June, creating a "wall of wood" that hurt U.S. lumber producers. The 15% threshold would allow the United States to charge Canada retroactive duties.
Mr. Tamim said Canada has arrived at the 11.3% growth figure by comparing April to June, 2001, against April to June, 2000, whereas the U.S. wants to compare the numbers differently.
That presents the further threat that the two countries will get involved in a "son of softwood" dispute as each attempts to make sawdust of the other's figures.
Canada's four atlantic provinces have been excluded from the countervailing duty investigation because, unlike the rest of the provinces, they harvest most of their timber from private lands.
But Atlantic Canada is included in the Commerce department's related anti-dumping investigation due to conclude by Sept. 24.
Canada has maintained that its lumber exporters kept a tight rein on shipments to the United States after the softwood pact expired. Prices also rose in that period, indicating tighter supplies of the commodity.